Summary

Complaints from two women that the council did not fully inform them of the conditions attached to a section 157 restriction when they bought their properties. This meant they were not aware the council would only automatically grant consent to a future sale if the purchaser had a local connection.

The complaint

Complaints from two women that the council did not fully inform them of the conditions attached to a section 157 restriction when they bought their properties. This meant they were not aware the council would only automatically grant consent to a future sale if the purchaser had a local connection.

One of the woman also complains the council did not consult her when it reviewed its procedures to make sure it only grants consent for the sale of properties with section 157 restrictions to people with a local connection.

The other woman complains the council wrongly told her she could not rent out a room in her property.

Finding

The Ombudsman upheld the complaint and found fault causing injustice.

Recommendations

We recommend that the council, within three months of the date of this report, instruct the district valuer to carry out the following two valuations.

• To assess the value of the properties at the point at which the women sold with the partial restriction advised by the council when they bought the properties.
• To assess the value of the properties at the point the women sold with the full section 157 restriction.

The district valuer should then compare the two valuations to see if the value of the properties was reduced by the full section 157 restriction. If the value was affected the council should pay 50% of the difference to the women.

We also recommend that the council pay £250 to each of the women to acknowledge the significant stress caused to them.

Further report

On 16 June we issued a further report after the council did not agree to pay the women 50% of the difference if the district valuer found the full section 157 restriction had diminished the value of their properties. The council's reason for refusing the recommendation is that the women's solicitors should have fully advised them on the implications of the section 157 restriction when they purchased their properties.

The council did ask the district valuer to undertake the valuation we recommended. The council has given us a copy of the valuation of one of the properties. The district valuer found no difference in the value between the restriction advised at the time of the purchase and the restriction as set out in the legislation. This is because the valuer considered the potential pool of buyers would be significant in either scenario.

It appears the council has misdirected the district valuer. The council became aware it had implemented the section 157 restriction at the time of the sale of the properties in more restrictive way than set out in the legislation. It would therefore have been more appropriate for the council to have instructed the district valuer to carry out the valuation on the basis of its more restrictive policy. So we cannot conclude the council carried out a proper valuation.

The council has not given us or the complainant a copy of the valuation of the other property.

The council will not agree our recommendation as its considers it is not its role to advise solicitors of the law as it applies to their clients.

We considered the council's arguments for not complying but call on the council to reconsider its response to our findings in light of our further report.

Ombudsman satisfied with council's response: 21 December 2016.

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